Nokia Case Study

Alarm Ringing: Nokia in 2010

“[...]Nokia’s problems are still fixable but the window is closing. I am not optimistic that they will be fixed in 2010 because there isn’t much time left, and if they aren’t fixed in 2011, Nokia will be in big trouble.” 1

Nick Jones, vice president, Gartner, Inc.2 in 2010.

MARKET LEADER IN TROUBLE

In September 2010, Stephen Elop (Elop) joined Nokia Corporations (Nokia) as the President and CEO. Elop, former head of Microsoft’s Business Division3 (MBD), was brought in to fix the numerous problems faced by the world’s leading mobile phone company. His tasks included the onerous job of reversing not only Nokia’s eroding market share in the high-end smartphone segment but also its slumping profits. “My role, as the leader of Nokia, is to lead this team through this period of change, take the organization through a period of disruption. My job is to create an environment where those opportunities are properly captured, to ultimately ensure we are meeting the needs of our customers, while delivering superior financial result,”4 said Elop.

The Finland-based Nokia had a presence in over 160 countries as of 2010. Though it was the world’s largest mobile phone maker with a market share of 35% in the first quarter of 2010, Nokia had been losing market share consistently in the high-end mobile phone market. According to analysts, problems began for the company with the increase in the global demand for smartphones, a segment in which Nokia was unable to find its footing compared to rivals like Research In Motion5 (RIM) and Apple6. Nokia was not only slow in launching smartphones with the latest version of its Symbian7 operating system (OS), but also in catching up with the touch-screen technology, they said. Nokia’s major problems were development of new software services, hardware design, and North American distribution.

1 Mikael Ricknäs, “Nokia on Long Comeback Trail after Smartphone Misses,” www.macworld.com, July 2, 2010.

2 Gartner, Inc. is an IT research and advisory firm.

3 The Microsoft Business Division